LOS ANGELES — Four people have been indicted on charges of running a fraudulent $40-million oil and gas investment scheme that targeted the elderly, federal prosecutors announced Friday.
More than 1,500 investors were promised 10% annual returns on their investments in limited partnerships created and promoted by three Beverly Hills companies, KS Resources, Weststar Exploration and Lazar Frederick & Co., according to the indictment.
Although KS Resources actually held interests in oil and gas properties, the indictment said the revenues generated were not enough to cover the returns promised to investors.
The U.S. attorney's office said the defendants engaged in a classic Ponzi scheme in which money from new investors was used to pay dividends to previously recruited investors.